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Collaboration in business process re-engineerIng: purchasing and supplies Valerie Bence
Centre for Logistics and Transportation, Cranfield University, UK

St James's University Hospital in Leeds is one of the biggest teaching hospitals in Europe and one of the largest acute service units in the UK National Health Service (NHS). Granted 'trust status' in April 1991, it employs over 5000 people and sees 450,000 patients a year (see Industry Note in Appendix 22.1). Operating income from the internal market totalled £125.8 million (1993-4) with 70% of the income coming from the contract with Leeds Healthcare. For 1994-5 the Trust has negotiated contracts with 12 health authorities and 130 general practitioner (GP) fundholders. St James's provides services both locally and to the wider Yorkshire community against the background of national, regional and local objectives and priorities required to meet the ever-changing demand on services. In spite of increases in activity by the hospital, admissions and waiting lists are increasing, reflecting this increasing demand (Table22.1). Table 22.1 Admissions

1991-2
In-patient Day cases Acute Waiting list Total

1992-3 17,198 21,893 37,793 8723 76,884

1993-4 15,641 27,237 39,490 8820 82,368

17,444 16,136 36,459 70,039

Health authorities want the best value for money service, best use of resources,and high patient throughput. In addition, the government wanted 2% more activity itt the financial year 1994-5 plus a 1% cost-improvement programme. In view of the constraints and demands placed on the hospital and their commitment to improving both quality and value for money, St James's began an innovative collaboration in 1991 with Lucas Engineering Systems Ltd (LES), the aerospace and automotive group. Initial contact between the two organizations was made during a working party on electronic data interchange and the NHS. A member of St James's supplies staff encountered work done by LES, who were keen to investigate the transferability to the public sector of some of the techniques that have led to increased efficiency in car manufacturing plants. Lucas, a leader in such systems, had developed their methodologies during their restructuring in the late 1980s and were now looking beyond the manufacturing sector. After an initial meeting, good working relations were established and possibilities were discussed of transferring the methods used in industry to within the hospital organization in order to improve the efficiency of working processes. LES gave a presentation to St James's at board level. This overview was not project specific, but did interest the board enough for LES to be invited back to hold a two-day workshop for senior hospital managers. This would investigate possible areas for collaboration using the Lucas approach to the management of change, involving business process redesign (BPR).The aims were: • to review LES redesign methodologies • to discuss whether and how these principles could be applied to specific change projects at St James's and/or compliment current initiatives • to discuss relevant case examples of the application of the methodologies in order to identify tangible benefits • to make specific decisions on how to progress the change programme. Following the workshop, the board gave the go-ahead for work with LES and proposals for possible projects were invited from within the hospital. Careful selection was necessary since there had to be an element of cost saving to pay for the project, which would hopefully go on to generate revenue for St James's. There were also issues surrounding trust status (management changes); the Patient's Charter (performance measurement); and customer care (quality) to consider. Selection criteria were developed based around the need to choose something with a good chance of success, which would test the thesis that these systems could be transferred from industry, and which was health related and financially...
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